Lamprell issued its fifth profit warning since May, as it said losses would be
much greater than previously forecast, but its shares jumped 17.3pc on hopes
it had finally turned a corner.

Lamprell issued its fifth profit warning since May on Monday, as it said losses would be much greater than previously forecast, but its shares jumped 17.3pc on hopes it had finally turned a corner.

The troubled oil-rig maker also said it remained under investigation by the Financial Services Authority (FSA) over its handling of inside information before June 7, the date of itssecond profits warning.

The group said that a review by external consultants, understood to be PricewaterhouseCoopers, had “revealed a much greater loss for the year than previously announced or anticipated”.

It now expected to make a loss of $105m (£66m) this year, compared with the loss of between $12m and $17m it anticipated in its third warning in July. It had said in October that the loss would be “significantly greater” than the July forecast but had not quantified it.

The company has reported a string of losses, delays and deferrals in individual projects, primarily relating to “slippage” of contracts blamed on worldwide equipment shortages, and delays to the delivery of wind farm vessels.

Lamprell’s former chief executive, Peter Whitbread, has returned to the top job temporarily, while Lamprell’s chief financial officer and chief operating officer also stood down as directors in October.

Mr Kennedy said on Monday he was “very disappointed” by the latest profits warning but said: “Having now identified the issues and their potential financial impact, the group is in a much better position to draw a line under these events and to take appropriate steps to mitigate or address the issues.”

He added that the outcome of the external review “vindicates the board’s earlier decision to restructure the management team”. The company now hoped for a “gradual” return to profitability in 2013.

Analyst Andrew Whittock at Liberum Capital said the warning was “disappointing” but that “the share price fails to reflect the underlying value of the business” and noted that the group remained “confident of support from its lenders”.

Analysts at Bank of America Merrill Lynch issued a double-upgrade note to a “buy” recommendation, arguing: “Whilst we cannot be certain of no further warnings, we are much more confident that the most significant problems have been uncovered and accounted for.”

After falling in early trading, the shares climbed 12 to close at 81¼p.

At the time, Mr McCue insisted both sales were “normal and entirely proper” and that neither manager had been party to the contents of the warning.

The second warning, which also caused a share price slump, was cited by Lamprell as the end-date for the FSA’s investigation. Between the first and second warnings the only disclosed trade by a director or manager was a share purchase.

Lamprell and the FSA declined to comment on the focus of the investigation.